Waive Tax/Insurance Escrow to Lower DTI?

4 Replies

Looking at how to improve my DTI for next purchase and noticed that the mortgage payment on my credit report includes full escrow (taxes/insurance) which is significant at $1,200. Since its on my credit report it will be used for DTI calculations.

If I manage to get my mortgage company to waive escrow, and the payment reported to credit bureau decreases, will other banks ask me to provide them proof of the tax/insurance payment amount when calculating DTI ratios?

They will not manual add it to your DTI unless you disclose that you've waived your escrow. All they can see on your credit report is the amount you pay for your mortgage each month and assume taxes and insurance are included.

@Jonathan Jayden  Sorry, I disagee with that.  They're going to ask for your bank statements and tax returns, and I agree with Upen, they will manually add those numbers in.

I actually have a few seller finance purchases that don't show on my credit report at all, but that's the purpose of the banks asking for all the paperwork - so they can put goether a full financial picture of the borrower.

- Tom

Originally posted by @Brian Acosta :

Looking at how to improve my DTI for next purchase and noticed that the mortgage payment on my credit report includes full escrow (taxes/insurance) which is significant at $1,200. Since its on my credit report it will be used for DTI calculations.

If I manage to get my mortgage company to waive escrow, and the payment reported to credit bureau decreases, will other banks ask me to provide them proof of the tax/insurance payment amount when calculating DTI ratios?

Waiving your tax and insurance impounds to improve DTI is not going to do anything to affect your DTI since the lender (assuming conventional financing) will hit you for property taxes, insurance, and assessments anyway.

The waiving of your Impounds or escrows is merely a personal preference on how you would like to pay your property taxes and insurance it has no bearing on DTI or income purposes.